This edition is all about saving money on your mortgage. This isn’t something most of us think much about because, it’s a mortgage, how do you work with that?
Pay an extra principal payment on your 30-year loan each month. On a 30-year $100,000 loan at 6 1/2%, the monthly principal payment in the first years are approximately $90 to $105/month.
At the end of a 30 year note without any extra payments, you’ve paid $227,544.49 with your interest being $127,544.49. If you add only one additional payment per year you’ve paid $185,980.00 with total interest paid being $85,980.00.
That’s at least worth thinking about.
Still another way to save money on your mortgage is to pay one half of your monthly mortgage every two weeks. By the end of the year, you’ve painlessly paid an extra payment.
If you structure it so that your payments are early so that the full amount is in by the due date, you can probably manage to do this without incurring any additional fees. For an additional surcharge per month, the bank that holds your house note will usually structure such a payment plan for you. I feel it’s best just to manage it yourself. Prepayment penalties only apply if you pay the mortgage off inside of three to five years after purchase, depending of course on your particular mortgage agreement.
. Kudos to having your home paid off, what a feeling to not have to pay that monthly monstrosity!
Interesting post. Glad to say I’ve paid off my mortgage but here in the UK the best savings are made by changing mortgage providers every few years. Many have offers for new people (lower rates etc), when the offer lapses move on to a new provider. May not be the same elsewhere of course.
Mike.
2007
Mike Perry